Dowie case puts PR industry on trial

Regardless of the Dowie-Stodder trial's outcome, it has forced everyone to take a closer look at PR

It's been almost a year since the federal indictments of former Fleishman-Hillard LA GM Douglas Dowie and SVP of public affairs John Stodder, accused of fraudulently overbilling clients hundreds of thousands of dollars in an alleged bid to meet corporation-expected financial projections.

When the allegations initially broke, it was a blow to PR in general: Front-page newspaper exposés cast a shadow of doubt over the industry, and clients questioned their firms' billing practices and the value of work provided. When the long-awaited - and for some, long-dreaded - trial of the two one-time executives finally began April 4 in LA, some practitioners feared those issues would again rear their ugly, industry-tainting heads.

While no PR pros agreed to be quoted on the record, most everyone has an opinion about how the Dowie-Stodder situation will - or already has - affected the industry. For the most part, however, people seem to believe that it's a game of inside baseball.

The damage has been done, they say, and although it was horrific, it has had some positive effects, such as encouraging agencies to take closer looks at their billing processes and ethics policies.

Still, PR firms that previously relied heavily on government contracts and public policy work to pay the bills are now having to look elsewhere for revenue. Whether it's due to the Fleishman fallout or the economy, those clients remain reticent to issue RFPs, opting to do work in-house - or not do work at all.

As anyone immersed in the field will acknowledge, PR can be difficult to understand. While the public may have some idea of what PR firms do - something along the lines of advertising - they don't really "get" the business and certainly not its convoluted hourly billing procedures.

Before the trial began, for example, potential jury members struggled with the concept of why the LA Department of Water and Power (DWP) would need Fleishman to handle its PR at all. "Water is water," one prospective panelist said. "What do you need to know?"

Those following the proceedings in US District Judge Gary Feess' courtroom have learned more than just why the DWP needed - or didn't need - an outside PR firm. They have also been introduced to new definitions for seemingly simple words, including "pad," "value billing," "write-up," and "trust."

While the prosecution presents Dowie as an "abusive, arbitrary, and humiliating person to work for," his defense team, led by attorney Tom Holliday, reminds jurors that this Vietnam-hardened, no-nonsense businessman is "not the man who put on the mask and tried to rob somebody." Perhaps, Holliday suggests, "a couple of people did wrong. But not the people sitting here."

Stodder's attorneys, led by Tim Conway-esque counsel Jan Handzlik, take a different approach, focusing on Stodder's creative side to position him as a gifted man struggling to do his job with pride.

"Mr. Stodder, as many people can attest, is not a detail person," Handzlik has told jurors on more than one occasion, appealing to their passion for the underdog. "But he is a great PR person."

These characterizations have been repeated - most recently, by government witness and former Fleishman SVP Fred Muir - throughout the trial, painting the agency's corporate culture as one in which employees were intimidated and even demeaned by Dowie, but also treated to office perks, such as weekly massages and catered lunches.

The trial has a personal side, as well. As in other cities, the LA PR community is small and relatively tight-knit - and the long list of government witnesses covers representatives from firms all over town.

It remains to be seen how this will affect Fleishman, if at all, but the firm is fiercely protecting its image. While not active participants in the trial, Fleishman is represented in court daily by its own team of attorneys.